Yet another hike in US Treasury rates, which price the publication of the Fed’s minutes relating to the last meeting of 2021.
The minutes revealed the Fed’s intention to raise fed funds rates earlier or faster and, also, to reduce its balance sheet.
“Participants generally found that, given their individual projections on the economy, the labor market, and inflation, it might be justified to raise rates earlier or at a faster rate than the participants themselves previously anticipated. – reads the minutes of the Fed led by Jerome Powell – Some participants also pointed out that it might be appropriate to start reducing the size of the Federal Reserve’s balance sheet relatively soon, after starting to raise rates on fed funds “, read in minutes of the FOMC, the monetary policy arm of the Federal Reserve, led by Jerome Powell.
The rates on ten-year Treasuries – which already in the first session of 2022 on 3 January had reported the strongest rally since the beginning of the year since 2001, precisely by betting on a more hawkish Fed – rose yesterday to 1.70%.
Today, 10-year yields are up to 1.7281%, while 30-year yields are up to 2.12%.
Commenting on what emerged from the minutes, Bloomberg economist Yelene Shulyatyeba pointed out that “the words of FOMC exponents on the labor market suggest that, in their opinion, the economy is very close to maximum employment or that it already has it. reached “.
As a result, “it is possible that the economy has hit the target of full employment earlier, with a smaller workforce than previously expected, which means that a more restrictive policy is needed sooner than it is. anticipated “.